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Long term government bonds vs corporate stock; bond markets

7. Compared to interest rates on long-term U.S. government bonds, interest rates on ____________ fluctuate more and are lower on average.
high quality corporate bonds
three-month Treasury bills
low quality corporate bonds
home mortgages

8. Statement (1) A bond is a debt security that promises to make payments periodically for a specified period of time. Statement (2) A stock is a security that is a claim on the earnings and assets of a corporation.
Statement (1) is true; Statement (2) is false
Statement (1) is false; Statement (2) is true
Statement (1) and Statement (2) are both true
Statement (1) and Statement (2) are both false

9. Statement (1) Debt markets are often referred to generically as the bond market. Statement (2) Bonds are routinely traded in capital markets.
Statement (1) is true; Statement (2) is false
Statement (1) is false; Statement (2) is true
Statement (1) and (2) are both true
Statement (1) and (2) are both false

Solution Preview

7. Compared to interest rates on long-term U.S. government bonds, interest rates on
____________ fluctuate more and are lower on average.

Answer: Interest rates on treasury bills are lower than government bonds. All ...

Solution Summary

The following posting discusses three questions based on interest rate on long-term bonds, security of bond and stocks and discussed the problem on debt market, bond market and capital market.

$2.19